ACNielsen Unveils Predictions for 2006; ''Year in Preview'' Anticipates Five Key Trends to Help Decision-Makers in 2006.

SCHAUMBURG, Ill. -- ACNielsen, the world's leading authority on consumer behavior, today has announced five predictions for the coming year. These predictions in health and wellness, retail, beverage alcohol and Boomers are intended to help decision-makers anticipate retail trends in 2006.

The Next Low-Carb Craze?

Prediction: "Low GI" products are the next nutritional buzz; also, antioxidants will grab double-digit increase in sales.

U.S. consumers will continue to obsess over their health in 2006 as growing rates of obesity, diabetes and high blood pressure will have many Americans re-examining the foods they eat.

ACNielsen's LabelTrends(TM) service, which tracks product label health claims, provides a barometer of American health trends. Terms such as "low fat", "low sodium", and "low glycemic index" can now be measured in addition to a product's size and contents. This year, expect a surge in food and beverages touting low glycemic index (GI) claims. LabelTrends analysis shows sales of GI products had a big jump from 2004 to 2005, and they expect the trend to continue.

Spectra's BehaviorScape(TM) Framework creates a clear-eyed understanding of how Americans view health and wellness issues. By segmenting consumers into BehaviorStages(TM) and LifeStyles - based on urban density and affluence, Spectra can accurately predict Americans' behavior.

Using BehaviorScape, Spectra estimates that 50 percent of American consumers are "health neglectors" who care little about their health and tend to be overweight. They love convenience foods, which are often processed and unhealthy.

"Any new food trend needs to get at least some traction among this mainstream group to truly break out," said Libbey Paul, Spectra's Senior Vice President of Marketing.

Overlaying the purchase data (LabelTrends) onto the behavior data (BehaviorScape) allows one to make more specific data-based predictions of new health trends. For example, LabelTrends analysis shows sales of GI products among the neglectors market segment demonstrated an increase of almost 150 percent from December 2004 to December 2005, which is one of the biggest jumps among all health-related claims. While dollar sales of GI products are relatively small, this signifies the potential emergence of a blockbuster trend to keep an eye on.

If health neglectors are at the tail end of the latest health trends, "health activists" are at the leading edge since they are highly educated and have more money to spend on expensive health foods. Food industry marketers must pay close attention to what this affluent group buys as this segment is a health and wellness sweet spot, and may be a leading indicator for emerging health and wellness trends. From December 2004 to December 2005, spending on antioxidants in health activists' markets was estimated to be among the highest of all health-related categories in terms of year-over-year growth. Look for antioxidants, led by liquid tea (up 1000 percent in dollar sales year-over-year), to make an even bigger splash in 2006. Why? In addition to their consumption by activists, antioxidants was also one of the fastest growing health claim among neglectors markets with 52 percent year-over-year increase in dollar sales, showing promise that along with GI goods, antioxidants will hit the mainstream in a big way.

Table:

Health
                       Neglectors                     Health Activists

                        Markets                            Markets
                      $ Percent                           $ Percent
                   Change vs. Year                        Change vs.
Health claim             Ago          Health claim         Year Ago
Glycemic Index           149        Antioxidants              31
Antioxidants              52        Organic                   17
Whole Grain                7        Preservatives             10
Vitamin & Mineral          5        Omega-3                    8
Omega-3                    1        Vitamin & Mineral          5

Dollar Store Inflation

Prediction: Look for dollar stores to transcend their dollar position in 2006.

As the dollar store continues to mature and reach saturation in the marketplace, it begs the question: where will dollar stores find new growth? Results from past data show that faster growing retail segments are those targeting middle to high income consumers. Dollar stores have an opportunity to seize market share from other value retailers by expanding their price point and offerings.

In 2005, the average purchase at a dollar store was $12, while mass merchandisers saw an average basket of $43. To steal some of this wallet share, expect dollar stores to become mini super-centers by introducing non-traditional products, including fresh and frozen sections.

"This new merchandise will increase the dollar store's offerings as a broader selection of products will rise above the one dollar price point," said Todd Hale, ACNielsen's Senior Vice President of Consumer Insights and an authority on the consumer packaged goods industry. "Dollar stores will now be able to better compete as value-driven retailers and give customers an added opportunity to save on groceries."

While the store's name may remain the same, consumer perception of the dollar store concept will change. Starting in 2006, the dollar store will be known for great value and selection similar to "dime stores" of the last century. In the years to come, we may see the value store evolve into its own, newly defined retail channel.

Extreme Beer Makeover

Prediction: Beer will regain momentum in 2006 through innovation.

Beer has traditionally been the grocery channel's largest beverage alcohol category. While beer constituted 54 percent of alcohol sales in 2005, sales stalled compared to the previous year. In 2006, beer will undergo a major makeover as manufacturers attempt to revive waning sales by changing the way people think about beer.

An ACNielsen Homescan(TM) analysis of adult beverage consumers found that in 2005, beer drinkers were drinking less, demonstrated further by the fact that beer volume sales were down 0.4 percent. Another challenge to beer's supremacy: its key demographic, 21-34 year olds, traded their beer for other types of alcohol - mostly spirits.

This year, beer is ready for a comeback. Consumers have demonstrated a desire for experimentation, and brewers are responding. Expect to see a slew of flavoring innovations designed to broaden the appeal--and usage occasions--of beer. Robust flavors like bourbon cask ale, winter ale and pumpkin spice are targeted toward core beer drinkers, while milder flavor-seekers will be pleased to see the continued launch of seasonal beers such as blueberry, strawberry passion and citrus.

"Product innovations will re-establish beer as America's beverage," said Nick Lake, Vice President of Business Development at ACNielsen. "In addition to new flavors and seasonal options, watch for continued packaging innovations. The success of mini-kegs and cooler packs are just two examples of innovations making it easy and desirable for people to add beer to their social occasions."

Comparable to the growing trend among spirits and wine drinkers, beer consumers are also upscaling, thus opting for higher-priced beers. Expect to see continued growth among imports and craft beers, both among existing brands and new entrants into the market. Though these two segments account for a relatively small portion of beer sales, they are succeeding remarkably well, with imports showing an annual growth rate of 9 percent and crafts selling at a rate 7 percent higher than a year ago. The ultimate goal: increasing beer's usage occasions by taking it from the ball game to the night club and from the couch to the dinner party. By leveraging the lavish qualities of beer, the category will likely snag some image-conscious drinkers currently loyal to wine and spirits.

Boomer Backlash

Prediction: Marketers will need to recognize and cater to the different age groups within the Boomer generation in order to stand apart from the competition.

As we know, the first Boomers turn 60 this year, but, it's important for marketers to understand that not all Boomers are created equal. Younger boomers are still busy juggling families and careers, even as the older boomers are entering retirement.

Expect to see a subtle "Boomer Backlash" from young Boomers who do not relate to the advertising tactics aimed at Boomers entering their golden years.

"It may be simply because the Boomer generation is our largest that marketers tend to focus on them as a 'segment'," said Hale. "However, it is critical to look beyond the generation - to age, household makeup, income level, and lifestyle - when developing and executing a campaign. It's ineffective for marketers to lump Boomers together when the generation spans two decades."

The marketers that give both the older Boomers and the younger Boomers the attention that each deserve will ultimately be the ones who win the marketing war and the big boomer dollars.

The Grocery Store Gets a Face-Lift

Prediction: The grocery channel will continue to evolve to focus on service rather than convenience.

Trips to the grocery store have been declining in recent years as consumers flee to category killers, mass merchandisers and supercenters. Grocery stores should capitalize on the opportunities that market segments present such as older Boomers - especially from a healthcare perspective.

Driven by an aging population, the number of prescriptions has increased from 2 billion to 3.2 billion in the last decade. Expect a new emphasis on customer service as grocery stores hire nurses or health consultants for basic prescription writing and assisting in complicated medical-related questions.

The return of customer service will extend beyond health and wellness, fueled by technology. With front-of-store applications, such as scanners and self-checkout becoming commonplace, look for savvy retailers to place experienced employees in the aisles, assisting customers with purchasing decisions and recommendations. Whether helping someone read a label, reaching for a product on a high shelf or recommending a wine to pair with an entree, more assistance will be available throughout the grocery store.

"At ACNielsen, we realize that our clients have a critical need to understand their customers and the marketplace," said Tom Markert, ACNielsen's chief marketing and client service officer. "We strive to provide this type of advisory information to our clients and the industry every day to help them make the best decisions possible. We plan on continuing to share these insights throughout the year on a variety of topics, and at year's end we will gauge how far the industry has grown."

About ACNielsen

ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools, and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

About Spectra

Spectra, a VNU business, serves the fast moving consumer goods industry with consumer-centric marketing solutions, creating marketing ROI by measuring the consumer behavior impact of all demand side spending. Spectra provides clients with world-class segmentation and targeting services that help them identify high-value consumers, uncover new opportunities and execute marketing and sales efforts at the store level. For more information, visit www.spectramarketing.com.